Saturday, October 4, 2008

Greg Mankiw's Blog: Why are real interest rates rising?

Greg Mankiw's Blog: Why are real interest rates rising?

That certainly has been happening with short-term Treasury bills. But look above to see what's been happening to the yield on 5-year inflation-adjusted government bonds. (Click on the graph to enlarge.) If one wants to flee risky assets and invest safely, for many investors these securities are a pretty good place to be. But their yields, rather than falling, have been rising sharply of late.

Instead tuck into your money at a bank get nominal interest, buy bond or real-estate is better investment. He says, of course he knows all but he pretend to be “puzzle “don’t deceived by his playing act, this is introductory economic!

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